Nathan Bass Oct. 29, 2012, 6:13pm

SAN FRANCISCO (Legal Newsline) - A former member of the "MIT Blackjack Team" - depicted in the book "Bringing Down the House" and the movie "21" - lost her Fourth Amendment claim on appeal to the U.S. Court of Appeals for the Ninth Circuit.

However, the approximately $20,000 award of defendant's attorney fees and costs assessed to her by a Nevada federal court was vacated.

"Plaintiff-Appellant Laurie Tsao is a so-called 'advantage'gambler - a professional gambler who uses legal techniques, such as card counting, to win at casino table games, especially blackjack," wrote Judge Marsha S. Berzon.

In the early morning of March 19, 2008, Tsao was arrested on a charge of trespassing at the Las Vegas Caesars Palace after security recognized her. She had been escorted out of Caesars Palace or other Desert Palace-owned properties on at least five occasions in the past and each time she was warned that if she returned she could be arrested for trespassing.

Tsao challenged her arrest as an "unreasonable search and seizure" under the Fourth Amendment of the U.S. Constitution and also alleged a variety of state law claims. The district court, after denying numerous motions for summary judgment by Tsao, granted defense motions for summary judgment on all counts and assessed Tsao defense costs and fees, finding her claims "frivolous, unreasonable, and without foundation."

Caesars' security employed personnel who had been trained by the Las Vegas Metro Police Department and were authorized to issue citations to trespassing customers as a result of this training. The policy of the casino was that security could either (1) warn the trespasser and let them go, (2) issue a citation to the person who would then have to go to court on the trespassing charge, or (3) do a citizens arrest and then turn them over to the LVMPD.

Importantly, the court found under the "joint action test" that the arrangement that Desert Palace had with the LVMPD made the casino a "state actor" and opened it up to the federal constitutional challenges under U.S.C. § 1983.

Although the court did validate Tsao's right to bring the constitutional claim, they found that the casino had not violated her constitutional rights. Tsao argued that because she had received several promotional offers from the casino after her last "trespassing," then the casino had no right to arrest and detain her. She asserted that casino's "omission" from communicating her promotional offer to the security team was "deliberate indifference" which led to her arrest.

The Court wrote, "To show deliberate indifference, Tsao must demonstrate that Desert Palace was on actual or constructive notice that its omission would likely result in a constitutional violation. Only then does the omission become the functional equivalent of a decision by Desert Palace itself to violate the Constitution."

She had "not introduced facts to make this showing" and "there is no indication that this problem has ever arisen other than in the case of Tsao herself... Tsao is a professional gambler, and, having been kicked out of the casino at least five times under a variety of aliases, was well aware that she was most likely not welcome at the Caesars Palace blackjack tables."

The court affirmed the district court's grant of summary judgment to the defendants on Tsao's constitutional claims and sent her state law claims back for further proceedings. Tsao did have a partial victory, however, when the court ruled her claims were not "groundless, without foundation, frivolous, or unreasonable" as required to assess costs and attorney fees and they vacated the award to the defendants.

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